Cotton

Cotton

Cotton is an arable crop used mainly for its fibre. Cottonseed is crushed to produce oil for food uses and oilseed cake for animal feed. European cotton production represents only 1% of world cotton production. In the European Union, cotton is still grown in two main countries, Greece and Spain.

Cotton is an arable crop used mainly for fibre. The cottonseed, which remains after cotton is ginned, is used to produce oil for human consumption or oilseed cake for animal feed.

Currently, cotton is produced only in three Member States on around 300 000 ha. Greece is the main cotton grower, with 80% of European cotton area, followed by Spain (mainly the region of Andalucía) with a share of 20%. Bulgaria produces cotton on less than 1 000 ha. Cotton production has ceased in Italy in 1991 and in Portugal in 1996.

Although cotton represents less than 0.2% of the value of European agricultural production, it has strong regional importance in the two main producing Member States.

Following the latest reform in the cotton sector, EU production of ginned cotton decreased to similar levels as the mid-eighty's.

In 2013, the EU cotton production is estimated less than 300 000 t, which represents only 1% of world cotton production.

European imports of cotton have fallen sharply over the last 10 years: from 870 000 t in 2002 to 132 000 t in 2012.

Over the same period, EU exports remained relatively stable, fluctuating around 250 000 t per year.

The EU market is completely open as there are no import duties or export subsidies on cotton.

EU cotton policy

Cotton aid was introduced in 1981, with the accession of Greece to the Community. The European cotton policy has been reformed several times since then, and for the last time in 2006.

In 2004 and 2006, support for cotton was largely de-coupled from production and integrated into the single payment scheme.

The deficiency payment system in force until then was abandoned in favour of a support provided through a combination of decoupled payments (65% of the total aid existing under the previous support regime) and crop-specific aid (35%).

The current regime is designed to encourage a competitive, sustainable and market-driven cotton sector, while safeguarding the legal commitments of supporting "the production of cotton in regions of the Community where it is important for the agricultural economy".

As any other farmer, cotton growers are entitled to receive direct aid in return for respecting strict standards of environmental protection, animal welfare and food safety ("cross compliance") and are free to produce whatever they wish.

The direct payment system makes it easier for cotton farmers to switch to different crops or types of production in response to market developments.

In addition, the EU provides some crop-specific payment for cotton, limited to a certain base area per Member State.

To be eligible for crop-specific aid, farmers must only grow cotton on land authorised by the Member States, using authorised varieties of seed and subject to minimum quality of cotton actually harvested.

The purpose of this crop-specific payment is to avoid production being abandoned in regions where cotton is important for the agricultural economy.

A maximum of 302 000 hectares are eligible for coupled support each year. Of this, 250 000 hectares in Greece and 48 000 hectares in Spain.

To help the EU cotton sector become more economically viable, a restructuring scheme was launched in 2009, providing possible support for the following measures: